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Overview of the cash accounting scheme

Regulations made under VATA 1994, s 25, Sch 11, para 2(7) provide that a taxable person may, subject to meeting certain criteria, account for VAT under the cash accounting scheme¹.

For the manner in which input tax and output tax are accounted for under the scheme, see V3.418, V3.503 and V5.108A. HMRC may vary the terms of the scheme by publishing a notice².

Persons eligible to operate the cash accounting scheme

Taxable persons are eligible to begin to operate the scheme if³:

1. Ìý

   (1)ÌýÌýÌýÌý they have reasonable grounds for believing that the value of their taxable supplies for the period of one year then beginning will not exceed £1,350,000

2. Ìý

   (2)ÌýÌýÌýÌý they have made all returns which he is required to make

3. Ìý

   (3)ÌýÌýÌýÌý they have paid to HMRC all sums shown as due on those returns

4. Ìý

   (4)ÌýÌýÌýÌý they have paid to HMRC all sums shown as due on any assessments made under VATA 1994, s 76 or Sch 11